Navigating Business Rates On Empty Commercial Property

business rates on empty commercial property, also known as non-domestic rates, are a tax imposed on business properties in the UK. The rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). While business rates are a necessary source of revenue for local authorities, they can often be a burden for property owners, especially those with empty commercial properties.

The issue of business rates on empty commercial property has been a hot topic of debate and controversy for years. Many argue that the current system is unfair and discourages property owners from investing in and developing empty properties. Others believe that business rates serve an important purpose in funding local services and infrastructure. Regardless of the differing opinions, it is important for property owners to understand their obligations when it comes to business rates on empty commercial property.

One of the key concerns for property owners is the burden of paying business rates on empty commercial property. Unlike residential properties, which are exempt from council tax when empty for a certain period, commercial properties are subject to business rates regardless of their occupancy status. This means that property owners are required to pay rates on empty commercial properties, which can be a significant financial strain, especially for those who are struggling to find tenants or buyers for their properties.

The rates themselves are determined by the VOA, based on the rateable value of the property. The rateable value is an estimate of the yearly rental value of the property at a certain point in time. The VOA uses a set of criteria to assess the rateable value, including the size, location, and condition of the property. Once the rateable value is determined, the local authority applies a multiplier to calculate the actual rates payable by the property owner.

In recent years, there have been efforts to reform the business rates system to provide relief for property owners, particularly those with empty commercial properties. One such measure is the Empty Property Rate Relief (EPRR), which provides a temporary exemption from business rates for certain types of empty properties. Under the EPRR scheme, property owners can claim relief for a period of three or six months, depending on the type of property. This relief can help alleviate the financial burden of paying business rates on empty commercial property, providing some breathing room for property owners who are struggling to attract tenants or buyers.

Another option for property owners is to apply for hardship relief, which is available in cases where paying business rates would cause undue financial hardship. Property owners can make a case to the local authority, explaining their financial circumstances and demonstrating the impact of paying rates on their business. If the local authority deems the case to be valid, they may grant hardship relief, reducing the amount of business rates payable by the property owner.

In addition to relief schemes, property owners can take proactive steps to mitigate the impact of business rates on empty commercial property. One option is to explore alternative uses for the property, such as temporary rentals, pop-up shops, or storage facilities. By generating some income from the property, owners can offset the cost of paying business rates and potentially attract tenants or buyers in the future.

Property owners can also consider appealing the rateable value of their property if they believe it has been inaccurately assessed by the VOA. The appeal process involves providing evidence to support the case for a lower rateable value, such as rental comparisons, valuation reports, or details of any changes to the property. If the appeal is successful, the rateable value will be revised, resulting in a lower business rates bill for the property owner.

In conclusion, navigating business rates on empty commercial property can be a complex and challenging process for property owners. The burden of paying rates on empty properties can be a significant financial strain, especially in cases where the property is struggling to attract tenants or buyers. However, with the right approach and awareness of relief schemes and appeal processes, property owners can take steps to mitigate the impact of business rates and find ways to make the most of their empty commercial properties.